PER 2015
Finally raising the GDP is important in any country. It is the monetary value of all the finished goods and services produced each year. It is made up of five main components. These are consumer spending, investment, government spending, exports and imports. The equation for GDP is AD=C+I+G+(X-M). Clearly this shows that GDP is a key component to any economy in the world.
Figure 1: http://www.theguardian.com/business/2015/mar/31/uk-gdp-growth-revised-up-to-06
Figure one shows that the UK has had to recover from a recession lasting between Q2 2008 and Q2 2009. Although it has recovered since then it still isn’t at the trend rate of growth that it was beforehand. In fact according to an article in The Guardian the UK has had its slowest recovery from a recession since the 1920s.Raising GDP would get the economy back to the trend rate it was before the recession. It would also come with many benefits. As production would increase then there would be a need for more workers so unemployment would fall and there be a rise in national income. This would allow people to enjoy more goods and services, therefore increasing their standard of living. I believe that all these issues could be solved by increasing GDP, apart from global warming. Raising GDP would trigger the tickle down effect to reduce inequality. It would also reduce the budget deficit as it would bring confidence into the economy again and make the economy stronger so that the debts are more affordable. That is why I believe that raising GDP should be the UK’s primary objective of economic policy. Inequality is definitely an issue but it cannot be sorted out unless the UK has a strong economy. The government can’t tackle inequality if there isn’t any money to do it with. The way the current government are tackling inequality is by trying to create the trickle-down effect. This is when the money from the top trickles down to the bottom. Climate change too is a telling problem but it’s not much use if only the UK try and tackle it. This is shown by the fact that although Americans only make up 4% of the world’s population, they produce 25% of the carbon emissions. Also countries are reluctant to do anything as other countries will benefit from what they do without having to pay a penny. As much as immigration creates conflict and keeps wages down it has hugely increased our GDP as we are producing more than ever before. The immigrants pay more taxes to the UK government that they receive in benefits and they allow the country too run efficiently as they are willing to do jobs many people aren’t.
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